For Immediate Release
Chicago, IL – January 6, 2022 – Stocks in this week’s article are Nexstar Media Group Inc. (
NXST Quick Quote NXST - Free Report) , Universal Health Services Inc. ( UHS Quick Quote UHS - Free Report) , salesforce.com ( CRM Quick Quote CRM - Free Report) , W.W. Grainger Inc. ( GWW Quick Quote GWW - Free Report) and Marvell Technology ( MRVL Quick Quote MRVL - Free Report) . Solid Sales Growth Makes These 5 Stocks Worth Owning Now
Steady sales growth holds the key to survival in a competitive operating backdrop. Yet, investors often ignore sales growth as a reliable metric when it comes to picking stocks. This might be because of their preconceived notion that a company’s stock price is typically sensitive to its earnings momentum.
Nevertheless, it’s worth keeping in mind that when companies incur losses, albeit temporarily, they are valued based on their revenues, as top-line growth (or decline) is usually an indicator of a company’s prospects.
With regard to this, stocks like
Nexstar Media Group Inc., Universal Health Services Inc., salesforce.com, W.W. Grainger Inc. and Marvell Technology are worth betting on.
A company can improve earnings by resorting to expense control measures while maintaining stable revenues. However, sustainable bottom-line growth invariably requires higher revenues.
Therefore, the Price-to-Sales (P/S) ratio can be an apt metric for stock valuation. The importance of this metric lies in the fact that management has limited scope to manipulate revenues unlike earnings.
While sales growth provides investors an understanding of product demand and pricing power, it doesn’t reflect whether the company is operating efficiently. A huge sales number does not necessarily convert into profits.
Hence, a consideration of a company’s cash position along with its sales can be a more dependable strategy. Significant cash in hand and steady cash flow provide a company with more flexibility concerning business decisions and investments.
For the rest of this Screen of the Week article please visit Zacks.com at : https://www.zacks.com/stock/news/1847767/solid-sales-growth-makes-these-5-stocks-worth-buying-now?art_rec=quote-stock_overview-zacks_news-ID01-txt-1847767 Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. About Screen of the Week
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